Tarmac confident it will beat demerger protests

Firm receives enough assurances from investors to see off critics of payments to executives.

Tarmac was confident that the six motions on its demerger would be passed at its extraordinary general meeting in Birmingham yesterday, despite criticism from shareholders and disgruntled pensioners.

Even if shareholders vote against any of the motions, sources close to the company said the firm had received enough assurances from investors to guarantee a majority in a proxy vote.

A Tarmac spokesperson said: “From the discussions we have had with fund managers, the indications are that there will be a good majority in favour on all the resolutions.”

A source close to the company said: “Having spoken to the institutional shareholders, I would imagine that it will go through easily on the full vote. I don’t think there are going to be any shocks, but it might be a bit of a bumpy ride.”

The motions deal with the mechanics of splitting construction business Carillion from the aggregates business, Tarmac. They also seek approval for Carillion chairman Sir Neville Simms’ £1.37m compensation package and the Carillion Founders Equity Plan, which could see Sir Neville paid up to £3.4m in shares over three years.

Investors Standard Life and Clerical Medical, which hold stakes of 2.5% and 1.5% respectively in the construction and materials business, had threatened to vote against these two resolutions.

The indications are that there will be a good majority in favour of all resolutions

Tarmac spokesperson

Clerical Medical’s William Claxton-Smith said his primary objection was that the resolutions had been bundled and that his company had not been consulted properly.

He was also concerned that the roles of chairman and chief executive had not been split and that a finance director had not been appointed. “I object to the ‘take it or leave it’ attitude, which is saying take the board structure as it is,” he said.

The Association of British Insurers, representing insurance company investors, spoke out about the lack of information over the demerger. It also voiced concerns about the Founders Equity Plan and the concentration of power under Sir Neville.

The biggest protest was expected from a number of pensioners upset about a lack of consultation over changes to their pensions.

Pensioners claim that the changes had left 60% of them uncertain about the future. They said Tarmac planned to withhold details of how the schemes would be split until after the EGM. The 10 trustees were expected to make a strong defence to these allegations before the meeting.